Delaware		36-4088644
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

				Page No.
PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets at September 30, 2002 (unaudited) and December 31, 2001		3
		Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2002 and September 30, 2001 (unaudited)		4
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001 (unaudited)		5
		Notes to Condensed Consolidated Financial Statements (unaudited)		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.		Controls and Procedures		16
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings		17
Item 2.		Changes in Securities and Use of Proceeds		17
Item 3.		Defaults Upon Senior Securities		17
Item 4.		Submission of Matters to a Vote of Security Holders		17
Item 5.		Other Information		17
Item 6.		Exhibits and Reports on Form 8-K		18
SIGNATURES				19
CERTIFICATIONS				20

		September 30, 2002				December 31, 2001
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	25,340			$	40,677
Short-term investments			10,295				—
Trade accounts receivable, net			2,455				6,670
Income taxes receivable			—				158
Other current assets			1,433				2,534
Total current assets			39,523				50,039
Property and equipment, net			2,718				3,934
Other assets			515				721
Total assets		$	42,756			$	54,694
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	560			$	1,096
Billings in excess of revenue earned on contracts in progress			264				443
Deferred revenue			2,289				2,265
Accrued compensation			1,182				1,686
Accrued expenses and other current liabilities			1,354				2,274
Accrued restructuring			503				950
Current portion of capital lease obligations			730				815
Total current liabilities			6,882				9,529
Capital lease obligations, less current portion			177				727
Total liabilities			7,059				10,256
Shareholders’ equity:
Preferred stock			—				—
Common stock			8				8
Additional paid-in capital			84,966				85,113
Accumulated other comprehensive income—currency translation adjustment			218				125
Deferred compensation			(1,775	)			(3,334	)
Treasury stock			(111	)			—
Accumulated deficit			(47,609	)			(37,474	)
Total shareholders’ equity			35,697				44,438
Total liabilities and shareholders’ equity		$	42,756			$	54,694

		Three months ended September 30,								Nine months ended September 30,
		2002				2001				2002				2001
Revenues
Product license		$	214			$	4,911			$	1,530			$	18,709
Service			3,272				6,084				12,715				17,967
Total revenues			3,486				10,995				14,245				36,676
Cost of revenues
Product license			190				272				522				924
Service (exclusive of $16 and $15 for the three months ended September 30, 2002 and 2001, respectively, and $46 and $43 for the nine months ended September 30, 2002 and 2001, respectively, reported below as amortization of stock-based compensation)			1,952				2,965				6,534				9,221
Total cost of revenues			2,142				3,237				7,056				10,145
Gross profit			1,344				7,758				7,189				26,531
Operating expenses:
Sales and marketing (exclusive of $353 and $442 for the three months ended September 30, 2002 and 2001, respectively, and $1,085 and $1,441 for the nine months ended September 30, 2002 and 2001, respectively, reported below as amortization of stock-based compensation)			1,488				5,022				8,084				20,164
Research and development (exclusive of $2 and $4 for the three months ended September 30, 2002 and 2001, respectively, and $7 and $14 for the nine months ended September 30, 2002 and 2001, respectively, reported below as amortization of stock-based compensation)			880				2,547				3,766				7,830
General and administrative (exclusive of $14 and $87 for the three months ended September 30, 2002 and 2001, respectively, and $59 and $213 for the nine months ended September 30, 2002 and 2001, respectively, reported below as amortization of stock-based compensation)			963				1,757				3,639				7,148
Amortization of stock-based compensation			385				548				1,197				1,711
Restructuring and other charges			—				1,827				1,213				1,827
Total operating expenses			3,716				11,701				17,899				38,680
Operating loss			(2,372	)			(3,943	)			(10,710	)			(12,149	)
Interest income			199				366				633				1,620
Interest expense			(26	)			(28	)			(58	)			(79	)
Other expense			—				—				—				(100	)
Other income, net			173				338				575				1,441
Loss before income taxes			(2,199	)			(3,605	)			(10,135	)			(10,708	)
Income tax benefit			—				(1,276	)			—				(3,817	)
Net loss		$	(2,199	)			(2,329	)			(10,135	)			(6,891	)
Basic and diluted loss per share		$	(0.27	)			(0.30	)			(1.26	)			(0.89	)
Weighted average shares outstanding—basic and diluted			8,040,148				7,858,913				8,047,879				7,747,132
Comprehensive loss:
Net loss		$	(2,199	)			(2,329	)			(10,135	)			(6,891	)
Foreign currency translation adjustment			48				7				93				(2	)